Weekly Market Update – November 7, 2025

Quick Takes

• Wall Street finished a volatile week lower, as US stocks snapped a three-week win streak, as worries about the Artificial Intelligence (AI) trade and high valuations fueled a broad risk-off pullback.
• The S&P 500 Index slid -1.6%, the small cap Russell 2000 Index fell -1.9%, and the Nasdaq Composite Index dropped -3.0% – its worst weekly performance since April – as investors rotated away from high-growth technology stocks.
• The US federal government shutdown reached the longest on record during the week, and what little economic data that was reported was mixed. Two separate providers of manufacturing and services activity showed opposite results for each.

Source: Bloomberg. Data as of November 7, 2025.
Price Returns for Equity, Total Returns for Bonds.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.

CNBC: The Senate late Sunday night passed the first stage of a deal that would end the U.S. government shutdown, which began on October 1. The procedural measure that allows other votes essential to the agreement to be held starting on Monday was approved with the minimum of 60 yes votes, after eight senators in the Democratic caucus broke with party leadership to support the deal. Forty senators voted no. The agreement, which was reached after round-the-clock negotiations over the weekend, would fund the U.S. government through the end of January.

Stocks snap 3-week streak on AI concerns and valuations

Wall Street finished a volatile week lower in a broad risk-off pullback fueled by worries about the Artificial Intelligence (AI) trade and high valuations. Major indexes fell across the board, as the S&P 500 Index slid -1.6%, the small cap Russell 2000 Index fell -1.9%, and the Nasdaq Composite Index dropped -3.0% – its worst weekly performance since April – as investors rotated away from high-growth technology stocks. Of course, the context of last week’s pullback is following weeks of record highs and relatively low volatility amid a dearth of economic data due to the prolonged government shutdown. A series of headlines raised concerns that the AI trade may have gotten ahead of itself at the same time investors are also questioning the health of the economy amid the government shutdown. There was a glimmer of hope on that front Friday, day 38 of the shutdown. With airlines delaying flights and the FAA directing the carriers to reduce the number of flights, stocks seemed to get a small boost late Friday on rumors an agreement to end the shutdown was in the works. Democrats offered to reopen the government in exchange for a one-year extension of Obamacare subsidies. However, the offer was quickly rejected by Republicans. Still, stocks held onto their gains for the day, as investors appeared to interpret the situation as a signal that movement toward a resolution was possible. 

What little data that did come out last week was mixed. Both the Institute for Supply Management (ISM) and S&P Global reported their respective Purchasing Manager Indices (PMIs) for the manufacturing and services sector of the US economy. S&P Global showed US manufacturing improved modestly, further into expansion territory. However, the ISM manufacturing report showed the US economy slipping further into economic contraction. For the service sector of the economy, the two data providers showed opposite moves, although both have the service sector in economic expansion. S&P Global showed their Services PMI decline in October, while the ISM Services report showed a notable increase in the service sector in October. On Friday, the University of Michigan reported that Consumer Sentiment fell to its lowest level since June 2022, which marked the lowest level ever recorded. On the same day, Consumer Credit outstanding increased more than Wall Street expected in September, and the August data was revised higher. With no October Employment Situation Report to gauge the health of nonfarm payrolls growth and the unemployment rate, Wall Street focused on the ADP report on private payrolls, which showed an unexpected acceleration of jobs created. Taken all together, the week’s data was clear as mud, making the prospect for a Fed rate cut in December difficult to assess. 

By the close on Friday, US Treasury yields were higher across the curve. The benchmark 10-year US Treasury yield ended the week up +8 basis point at 4.08%, the 2-year UST yield was up +9 basis points to 3.57%, and the 30-year UST yield rose +6 basis points to 4.65%. With yields up, bond returns were down (bond yields and returns move in opposite directions). The Bloomberg U.S. Aggregate Bond Index broke a four-week win streak with a -0.6% return. Non-US bonds slipped last week as well, with the Bloomberg Global Aggregate ex U.S. Bond Index returning -0.4% following a -0.5% loss the previous week.

US Treasuries generated positive returns, with short- and intermediate-term yields generally decreasing and long-term yields increasing. By the close on Friday, the 2-year UST yield was down -1 basis point to 3.56%, while the benchmark 10-year US Treasury yield ended the week up +2 basis point at 4.10%, and the 30-year UST yield up +5 basis points to 4.70%. With yields mixed, bond returns were little changed (bond yields and returns move in opposite directions). The Bloomberg U.S. Aggregate Bond Index barely edged up, returning 0.03%, but Non-US bonds slipped as the Bloomberg Global Aggregate ex U.S. Bond Index return was -0.13%.

Chart of the Week

The preliminary reading of the November University of Michigan Consumer Sentiment Index showed that US consumers are not happy campers. Sentiment fell to 50.3, its lowest level since June 2022, which was the lowest level on record. It was expected to dip to 53.0. That is down from 53.6 the prior month. In the same period a year ago, the index stood at 71.8. The Current Economic Conditions component dropped to 52.3 from 58.6 the prior month. The Consumer Expectations component fell to 49.0 from 50.3 the prior month. One-year inflation expectations ticked up to 4.7% from 4.6% the prior month. However, the five-year inflation expectations were 3.6%, down from 3.9% the prior month. The bottom line is that consumer sentiment remains under pressure as inflation, unemployment, mass firings, and now a record-breaking government shutdown have combined to make consumers less cheery as the holidays approach. Confidence was shaky across income levels but was especially negative in lower-income households.

Consumer Sentiment Approaches Record Low

US Consumer Sentiment and Component Indices

Source: University of Michigan, Briefing.com.

The Week Ahead

The government shutdown has halted most government economic data releases since it began on October 1. And with no end to the shutdown in sight, this week may be the lightest economic calendar ever seen. Wall Street would have received some relatively high-profile October updates on both consumer and producer price inflation, but instead, it is likely the only data investors will get is the NFIB Small Business Optimism report on Tuesday and weekly MBA mortgage applications on Wednesday. The U.S. stock market will be open on Tuesday, but the bond market will close for Veterans Day. 

In addition, earnings season is winding down so there won’t be as many headlines on that front as well. A few big names are reporting results this week though. On Monday, Coreweave, Occidental Petroleum, Plug Power, and Barrick Mining report results. They’ll be followed by Oklo on Tuesday and GlobalFoundries on Wednesday. Walt Disney will headline the earnings slate on Thursday, marking the last time they provide quarterly streaming service subscriber numbers. Cisco Systems, Flutter Entertainment, Tencent Music Entertainment, Circle Internet Group, On Holding, and Applied Materials will also report on Thursday.

*Data subject to delay if government shutdown continues

Did You Know?

OIL GLUT – The International Energy Agency (IEA) now expects global crude oil supply to increase +3.0% in 2025 and +2.3% in 2026, with demand expected to grow less than +1% in both years. As a result, 2025 is expected to see an oil supply glut of +2.3%, increasing to +3.9% in 2026 – both records dating back to at least 1997. (Source: IEA)

DOWNSIZING – According to a survey of 166 institutions with an aggregate AUM of $14.7 trillion, institutional investor target allocations to real estate declined from 10.8% down to 10.7% in 2025. While the decline was modest, it was the first annual decline since the survey began in 2013 when the target allocation was just 8.9%. (Source: Hodes Weill)

REPEAT NOT RHYME? – A Trump market redux appears to have flipped the old axiom “History doesn’t repeat itself, but it often rhymes.” Stock market performance at this point in President Trump’s 1st and 2nd terms now looks remarkably similar. From Inauguration Day through 10/29 in both 2017 and 2025, the S&P 500 was up roughly +14%, with Energy the worst performing sector and Technology the best during both periods. (Source: Bespoke)

This Week in History

DOW B-DAY – November 6, 1851, Charles Henry Dow was born. After working as a reporter, he co-founded Dow, Jones & Co. in 1882, which is the owner of The Wall Street Journal, Barron’s, and MarketWatch financial news outlets. He also devised the Dow Jones Industrial Average index in 1896. (Source: The Wall Street Journal)

Economic Review

• Due to the current partial US government shutdown, the release of the following reports has been delayed or postponed: 
• Weekly Initial Jobless Claims and Continuing Claims (Department of Labor)
• September Construction Spending (Census Bureau)
• September Trade Balance (Bureau of Economic Analysis) 
• September JOLTS Job Openings (Bureau of Labor Statistics) 
• September Durable Goods / Factory Orders (Census Bureau)
• October Employment Situation Report (Bureau of Economic Analysis)
• The Institute for Supply Management’s (ISM) Manufacturing PMI slipped to 48.7% in October from an unrevised 49.1% the prior month. That was shy of Wall Street consensus expectations for it to rise to 49.5% and marks the eight consecutive month the Manufacturing PMI has been below the 50.0% dividing line between economic expansion (above 50%) and contraction (below 50%). The details were mixed, with the index of New Orders, a sign of future demand, edging higher to 49.4% from 48.9% in September. The New Export Orders index also improved, to 44.5% from 43.0%. And the Employment index rose to 46.0% from 45.3%. The Prices index, a measure of inflation, declined to 58.0% from 61.9%, its lowest level since January. However, the Production component fell to 48.2% from 51.0% in September. 
• Unlike the competing ISM Manufacturing PMI, the S&P Global U.S. Manufacturing PMI remains in expansion territory, and it improved to 52.5 in September from 52.0 the prior month — marking its third month in expansion territory. That was in line with the flash reading two weeks prior, as expected. Production increased at a solid pace, while the gain in New Orders was the best recorded in 20 months. That was important because October’s growth was increasingly reliant on the domestic market as New Export Orders faltered. Exports declined for a fourth successive month and to the greatest degree since July. Tariffs reportedly remained the primary driver behind the drop in Exports, with sales declining to key markets such as Canada, China, Europe, and Mexico. Tariffs remained a key source of higher Input Prices during October, with latest data showing another round of historically elevated inflation, albeit the lowest since February. Output Prices were raised markedly in response, and to a quicker degree than September’s recent low.
• The ISM Services PMI improved to 52.4% from 50.0% in October, easily exceeding expectations for a 50.8% reading. Service-oriented companies, such as restaurants and retailers, employ the majority of Americans. The New Orders component jumped to 56.2% following the prior month’s 50.4% level. The Production component also saw a large improvement, to 54.3% from 49.9% the prior month, which was the first contraction in business activity since May 2020. The Inventories and Imports components both dropped -5.4 points back into contraction territory. The Backlog of Orders sank to 40.8% from 47.3% and Supplier Deliveries dipped to 50.8% from 52.6%. The Employment component improved to 48.2% from 47.2%. The Prices index was up marginally to 70.0% from 69.4% – the first reading above 70.0% since October 2022 and the eleventh straight month above 60.0%. Overall, the report showed a broad improvement in growth for the key service sector portion of the US economy, including an increase in the inflation component, which isn’t helpful for the Fed’s rate cut decision-making in December.
• The S&P Global U.S. Services PMI continued to improve in October, rising to 54.8 from 54.2, marking the 33rd month above the key 50.0 expansion level. Supporting growth in activity was a solid, and slightly faster, increase in New Orders. Employment growth was modest, and confidence about the future fell to a six-month low. Input Costs rose to the slowest degree in six months, which helped to explain a similar slowdown in the rate of Selling Prices (also the weakest since April).
• There was no October Employment Situation Report available last week as the Bureau of Labor Statistics remains closed because of the government shutdown. And with no updates on nonfarm payrolls and unemployment rates, Wall Street looked for clues on the job market from non-governmental agencies. On Wednesday, ADP reported that privately run businesses created +42,000 new jobs in October — the first increase in three months — providing a possible indication that the US labor market may be stabilizing. Wall Street estimates were for only a +22,000 increase in private-sector jobs after a revised -29,000 decline in the prior month. Most of the new jobs were concentrated in transportation and healthcare. Employment fell in leisure and hospitality, usually a sector that sees steady hiring as holidays approach. The ADP report typically takes a back seat to the BLS employment survey published at the start of each month. 
• Outstanding U.S. Consumer Credit increased by +$13.093 billion in September, well above expectations for a +$10.230 billion increase, and sharply up from $3.127 billion the prior month (revised up from the initially reported +$0.363 billion). That amounts to a +3.1% annual growth rate, down from the +0.7% annualized growth rate the prior month. Growth for revolving credit, such as credit cards, rose +1.5% for the month, after falling -5.6% the previous month. Nonrevolving credit, which tends to be much less volatile than revolving credit and includes auto as well as school loans, rose at a +3.7% rate following the prior month’s +2.9% increase. The data from the Federal Reserve is not adjusted for inflation and does not include mortgage loans, which is the largest category of household debt. The key takeaway is that the growth in consumer credit in September was driven by nonrevolving credit.
• Weekly MBA Mortgage Applications fell -1.9% for the week ending October 31, after rising +7.1% the prior week. The Purchase Index was down -0.6% after being up +4.5% the prior week. The Refinance Index fell -2.8% after jumping +9.3% the prior week. The average 30-Year Mortgage Rate ticked up to 6.31% from 6.30% the prior week.

Asset Class Performance

Source: Bloomberg.
Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by The Retirement Planning Group. The performance of those funds may be substantially different from the performance of the broad asset classes and to proxy ETFs represented here. US Bonds (iShares Core US Aggregate Bond ETF); High‐Yield Bond (iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (Vanguard Total International Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares US Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by 24% US Bonds, 10% International Bonds, 6% High Yield Bonds, 13.8% Large Growth, 13.8% Large Value, 3.6% Mid Growth, 3.6% Mid Value, 1.2% Small Growth, 1.2% Small Value, 16.8% International Stock, 4.2% Emerging Markets, 1.8% Real Estate.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.